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Cities start giving scooter companies a second chance

The backlash against electric scooters shows some sign of waning as cities that cracked down on the startups begin thinking maybe they aren't so bad after all.

Cities across the country moved aggressively to rein in, and even shut down, companies like Bird and Lime when hundreds of scooters
filled their streets and cluttered their sidewalks seemingly overnight earlier this year. Many impounded the scooters. Some levied fines.

Yet some cities are softening their stance as they realize scooters
can play an integral role in easing congestion, reducing pollution, and bolstering public transit. And the startups, having watched companies such as Uber be penalized for antagonizing municipal governments, are willing to play nicely if it means expanding their market.

Austin, Texas, offers a case in point. The city found itself inundated with Bird's sleek black scooters in April. Lime flooded the city with its bright green scooters a short time later.

Instead, city officials talked things over. As it happened, they'd been planning a dockless bikesharing program. Their plan called for eventually adding scooters to the mix, so they decided to work with the companies to make it happen, JonMichael said.

Rather than issue a cease and desist letter -- an approach some cities took -- Austin warned the companies that it would confiscate scooters blocking sidewalks. And city officials set to work crafting an ordinance governing a permitting process for scooter services, including speed restrictions and fees for operating.

Today you'll find 2,000 scooters all over Austin. People love them so much -- each scooter is ridden nearly 20 times daily -- that their batteries often go dead by noon, JonMichael said. And it's making life better in the city, too. JonMichael said people are taking fewer solo trips in cars, which means less congestion and pollution.

The city reviews each company's performance every six months, reserving the right to revoke the license of anyone who isn't playing by the rules. That's got the startups working hard to stay in the city's good graces by offering discounted rides to low-income residents and developing tools that allow people to report bad behavior by anyone zipping along on a scooter.

City officials now see scooter and bikeshare firms as allies in their efforts to improve quality of life and expand transit options. The startups are "bringing to the table discussions about developing a roadmap to deploy transportation that from the get-go has equity and access for all built into it," JonMicheal said.

Bird hopes to broker a similar alliance in its hometown of Santa Monica, California. The company launched in September 2017 and followed the ridesharing playbook that says it's better to seek forgiveness than permission. Bird launched without proper business licenses, and in February agreed to pay the city $300,000 in fines to settle a criminal complaint.

Despite the trouble, Santa Monica officials wanted electric scooters to stay given their focus on multi-modal transportation and carbon-light living. The city gave Bird and Lime conditional permits while it worked to set up a 16-month pilot program. Earlier this month, the Santa Monica government ranked applicants to its scooter program, and Bird placed 10th.

"That was a real wake-up call. This is a fantastic business, and there's a lot of competitors who want to do it," Dave Estrada, the Chief Legal Officer at Bird told CNNMoney. "It really helped us take a good look at how we were doing operations and how we can best serve cities."

That explains why Bird on Wednesday announced several concessions intended to curry favor with Santa Monica and other cities. It will let cities designate no-go areas where people can't ride or park scooters. It will grant cities the option to convey the rules of the road and other safety tips in messages users see before riding off. And it will share data that will help cities understand how people are using its scooters.

Bird went so far as to resubmit its Santa Monica application earlier this month, to be more appealing to the government. At the city's request, it has begun limiting the speed of its scooters to 5 mph on the beach path, and in Palisades Park, two areas that have been controversial. It also plans to send text alerts to riders who stray into areas where cities don't want scooters.

A lingering challenge for the industry is sidewalk riding, which irritates many pedestrians. The scooter companies instruct customers to ride in bike lanes, but bike lanes are rare and sometimes customers still choose sidewalks. Bird is exploring ways to discourage sidewalk riding, by automatically detecting with sensors when a scooter is on a sidewalk.

It may not be popular with every rider, but the startup has realized that cities are its customers too.

"We started understanding that we had one customer, the rider," Estrada said. "Now we really understand a lot better that customers include cities and people who don't ride Birds."